Storage Tank Rental Procurement Category Market Research Report Now Available from IBISWorld

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Although high transportation costs typically force buyers to source storage tank rentals from suppliers in proximity to their operations, the fragmented nature of the market has fostered price competition, which means that most buyers have several supplier options from which to choose and opportunities to negotiate rental rates. For these reasons and to help procurement professionals make better buying decisions faster, business intelligence firm IBISWorld has added a report on the procurement of Storage Tank Rental to its growing collection of procurement category market research reports.

Strong price growth will continue over the next three years as domestic oil and natural gas production fuel demand for storage tank rentals.

Los Angeles, CA (PRWEB)August 26, 2014

The market for storage tank rentals has a buyer power score of 3.3 out of 5. This score indicates a slight advantage for buyers over suppliers when negotiating supply agreements. The primary factor benefiting buyers is low market share concentration. IBISWorld market research analyst Sean Windle says, “While a few major renting companies exist, the majority of the 300 suppliers offering storage tank rentals are small and medium-size companies serving local and regional markets.” Major suppliers in the market include Stallion, Rain For Rent and Bakercorp International Inc. The fragmented nature of the market fosters price competition, especially for heavily populated areas that contain a large number of suppliers. Due to high transportation costs, buyers typically source storage tank rentals from suppliers in proximity to their operations. While this can sometimes limit choices for buyers in areas with fewer suppliers, most buyers have several supplier options from which to choose, giving them opportunities to negotiate rental rates.

Buyers also benefit from a low level of product specialization and low switching costs. “While steel tanks are specialized for different applications (e.g. oil and gas extraction and wastewater treatment), suppliers purchase these products from manufacturers and then rent them out to buyers,” says Windle. As such, the rental service provided to buyers is largely standardized, which helps keep switching costs low. Furthermore, as demand heats up for storage tank rentals, rental companies are increasingly procuring standardized models to minimize buyers' on-site setup times. For example, in natural gas fracking applications, where multiple tanks are laid out in proximity to one another, having standardized tanks with manifolds and other connections in the same area of each tank reduces setup times and eliminates the need for manual intervention.

While buyers enjoy the overall advantage when negotiating supply agreements, strong price growth over the past three years has hurt buyer power. Stronger demand from industrial companies, particularly oil and gas extraction, has caused rental rates to increase. Nonetheless, the fragmented and price-competitive nature of the market indicates that buyers can usually negotiate favorable prices. For more information, visit IBISWorld’s Storage Tank Rental procurement category market research report page.

This report is intended to assist buyers looking to rent storage tanks, which are used to temporarily store hazardous and nonhazardous liquids and solids in industrial applications, such as natural gas fracking, oil well drilling, chemical processing, utilities construction, environmental remediation services and wastewater treatment. Suppliers primarily consist of rental companies that purchase storage tanks from manufacturers to rent out to other businesses. This report does not include large-scale, permanent storage tanks, which are usually constructed on-site at petroleum refineries and other industrial facilities. Similarly, this report does not include storage tank rentals for consumer use.

About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.